2025 Budget: Increase allocations to funding of capital components, NASS charges FG

…as HoR PAC asks AGF to submit 2022 consolidated financial statement to Auditor General

By Tunde Opalana & Tom Okpe

As the National Assembly commences consideration of requests made by the Executive in the 2025 appropriation bill, it has challenged the Federal Government to increase allocation to capital expenditure in this year’s budget.

This charge was premised on the the realization of abysmal performance of the capital component of the 2024 federal budget.

The parliament bemoaned the huge discrepancies in the size of the recurrent expenditure relative to capital expenditure and the low level of fund releases for capital projects for Ministries, Departments and Agencies, MDAs in the 2024 budget.

This was brought to the fore on Wednesday at a joint sitting of the chairmen of Senate and House Committees on Appropriations and the Presidential Economic Team on consideration of the 2025 Appropriation Bill.

Senator Solomon Adeola and Honourable Abubakar Birchi, chairmen of Senate and House Committees respectively, agreed that the economic team should do something urgent to release more funds for capital projects as this is a major way for the people to feel the impact of government away from recurrent expenditure which affects only a negligible part of the population.

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Chief Kayode Odunaro, Media Adviser to Senator Adeola in a statement on Thursday in Abuja said the position of the National Assembly followed the report of the economic team led by Mr. Wale Edun, the Minister of Finance and Coordinating Minister of the Economy showing that overall so far 2024 budget performance was 43% with recurrent expenditure achieving 100% while capital budget only managed 25% performance.

Senator Adeola said he is an advocate of drastically reducing the ratio of recurrent expenditure to capital in the budget from the present level of about 80% for recurrent and 20% for capital to at least 60% to 40% stressing that capital projects in the budget and their implementation is a major spur for economic growth and direct impact on the people.

“Capital releases to MDAs are the major drivers of economic activities within the nation. Non release of funds for capital projects is a major issue in the performance of 2024 Budget so far and it is desirable that funds are released to prevent abandoned projects and ensure the success of the Renewed Hope Agenda of the president,” he stated.

Senator Adeola said it will not be cheery news for MDAs to come for their 2025 budget defense with record of non-performance of their core mandates as contained in capital budget stressing that within the period of the 2024 budget still running, effort should be made by Finance Ministry to release funds for capital projects.

Concurring with his counter part in the Senate, Hon. Birchi called for more releases for capital projects of MDAs for such projects as schools, roads, dams, hospitals and other social infrastructure instead of such items as debt repayment which he argued can be restructured in the interim.

“Most of the items of recurrent expenditure which takes a huge part of our budget and is implemented 100% will only directly affect about 10% of our population while capital projects of the MDAs will directly affect majority of over 200 million Nigerians in areas of social infrastructures provisions like hospitals, schools, roads, energy and similar” he stated.

The Minister of Finance confirmed that they have outstanding capital releases awaiting funding regretting however that the country cannot go back on the old ways of spending money that is not there to avoid backlash as happened in France and Germany of recent adding that there are warrants awaiting payment for capital projects.

Also throwing light on the issue, the Minister of Budget and Planning, Alhaji Abubakar Bagudu said the huge recurrent expenditure in our budgets is a function of our level of development and some of the societal challenges we are facing at this moment adding that some of the recurrent goes into the campaign of the military against insecurity which is yielding results to spur agricultural production and economic activities.

The Director General of Budget Office, Dr. Tanimu Yakubu also attributed the huge recurrent expenditure to past legacies inherited by President Bola Ahmed Tinubu in areas like unpaid pensions and gratuities which the administration has successfully addressed stressing that in the future there may be need for legislation by the National Assembly to limit the size of recurrent expenditure in the budget.

The meeting which had in attendance the Minister of State for Finance Dr, Doris Uzoka-Anite and the permanent secretaries of Ministries of Finance and Ministry of Budget and National Planning also deliberated on the issues of waivers and tax holidays which seems to reduce revenues for the government.

Also, the House of Representatives Committee on Public Accounts, PAC, expressed concern at low implementation of the capital component of the 2024 budget.

This was as the Accountant General of the Federation, Dr Mrs Shakirat Madein, appeared before the Committee for an interactive engagement on Wednesday.

The Committee Chairman, Rep Bamidele Salam who expressed dissatisfaction, as the Accountant General put the level of implementation of the budget at 25 percent also, observed that this was not helping the attainment of desired economic growth.

The Committee however, charged Madein on the need to submit the 2022 Consolidated financial statement of the Federal Government to the Auditor General of the Federation, in line with provisions of the 1999 constitution.

In his speech, Rep Salam stated that it was regrettable that from recent studies conducted in Kenya, Ghana and Rwanda, Nigeria is still lagging behind in submission and consideration of audit reports, largely due to non submission of Financial statement by the Accountant Generals office as required by law.

While considering submissions of the Accountant General on the low revenue remittances by many Government Owned Enterprises, the PAC Chairman said there was need for strict measures, to block revenue leakages through automation of processes and regular audit exercises.

The House Committee also asked the Accountant General, the Ministry of Foreign Affairs and Ministry of Interior to immediately, resolve all outstanding issues on the non automation of revenue collections from Foreign missions in order to ensure transparency and accountability in the process.

The Committee Chairman also, disclosed that the 2021 Auditor Generals report which was recently submitted to the National Assembly will receive accelerated consideration, immediately after the passage of the 2024 Appropriation Bill currently before the House.

Earlier in her speech, the Accountant General of the Federation attributed the delay in the submission of the consolidated financial statement to lack of sufficient data of government revenue from the Central Bank of Nigeria.

She said: “Efforts are at advanced stage to get the CBN submit necessary information,” giving an undertaking to conclude the exercise within two months.

“There are several initiatives in my office to strengthen existing regulations and initiate new ones to promote greater accountability in public expenditure management.

“The Financial Regulations 2009 has been reviewed and only awaiting for the approval of the Federal Executive Council, to become operational,” she said.